Case Study:
Living in Retirement Case Study

Nigel and Mary

Nigel and Mary are both aged 68 and are drawing their state pensions. Nigel also has a company pension of £9,000 a year.

Mary inherited a share portfolio from her father some years ago, currently worth £130,000, which generates £3,900 a year in dividends. From April 2018, £1,900 of this will be subject to income tax since the annual dividend allowance falls from £5,000 to £2,000.

The couple also have £250,000 in ISAs between them and £150,000 in cash deposits. They are drawing £10,000 a year from their ISAs to supplement their income.

They need an additional income of £10,000 a year to meet their needs. Nigel is considering whether to start drawing income of this amount from his pension fund (SIPP) worth £500,000.

If Mary transfers half her shares to Nigel, both will have dividend income below the £2,000 limit and will escape dividend tax. They can then each sell £11,000 worth of shares each year within their annual capital gains tax allowance. They can convert £20,000 a year each from their cash holdings into ISAs, and also run down their cash holdings by £10,000 a year to top up their income. Once the cash runs out, the capital in ISAs will have grown to support the same or larger annual tax-free withdrawals.

By keeping his SIPP untouched, Nigel preserves this capital outside his estate and ensures it can pass tax-free to his children. But the couple can choose to draw income from it later in life if they need to.

Get in touch

If you cannot see what you are looking for, call us on 01934 511 511 or email

News: Worry is the new normal

With Donald Trump in the White House, it’s unlikely that a week will pass without generating some new anxiety for investors. On top of the fears of armed conflict (even nuclear war) with North Korea, we have the possibility of a US trade war with China....

Read article

Meet the Team

Our team of financial planners have had years of experience and are on hand to help plan for your future.

Meet team